LIFE INSURANCE WITH LIVING BENEFITS
You might already have a decent understanding of life insurance benefits, like how it can protect your loved ones financially if you were to pass away.
But did you know that life insurance could benefit you while you’re still living? It is known as living benefits.
It is an option on your life insurance policy that enables a payout to the policy owner while still living.
WHAT ARE LIVING BENEFITS?
The contribution to your life insurance policy permits the policy owner to develop cash value that will sum up over your lifetime. In life insurance, it is termed as a living benefit as you are increasing the death benefit for your own use while still living the moment. When you pass away it is time for the death benefit to payout. But in the case of living benefits, you can use the money while still living.
Additional benefits and protections are offered by living benefit to you. When you have specific needs not covered by a standard life insurance policy a living benefit is then helpful. To personalize your policy according to your needs mainly rider is utilized.
LIVING BENEFITS CAN HELP PROVIDE ADDITIONAL LAYERS OF PROTECTION
Above all, life insurance with living benefits can help provide additional layers of protection – which is just one more way life insurance helps you protect what matters most to you.
UNDERSTANDING “CASH VALUE.”
The “cash value” in life insurance policies is the worth in your policy, and if you need it, it could be borrowed against or cashed out if you surrender the policy before death.
A life insurance policy’s cash value grows over time on a tax-deferred basis and can earn interest. You don’t have to pay taxes on increasing your cash value if it remains in your policy, but you might have to pay income tax if you withdraw the cash value.
Another thing to note is the consequences of withdrawing or surrendering your life policy. Sure, you’ll get the cash when you need it, but you’ll no longer have the death benefit, which is the amount your beneficiaries would receive upon your death.
INCREASE THE WORTH OF YOUR LIFE INSURANCE WITH LIVING BENEFITS
Many factors can increase the value of your life insurance policy. If you are interested in exploring life insurance with living benefits, or other options, we can answer any questions you might have. There’s no time like the present to plan for tomorrow.
GET A LIVING BENEFITS QUOTE
HOW DO I DETERMINE THE BEST COMBINATION OF POLICY BENEFITS?Each person has a unique reason for wanting to acquire Long Term Care coverage. In order to find the policy that best fits your needs, first, determine why you would like a policy to begin with. Some people would like the peace of mind that the maximum amount of Long Term Care coverage provides, while others are looking for coverage that won’t require too high of a budget. In either case, age, income, asset base, and tolerance for financial risk will need to be considered in order to determine what will work best for you. Our highly knowledgeable Long Term Care professionals will be able to provide technical advice and recommendations based on your needs.
CAN I STILL CHANGE MY BENEFITS AFTER MY POLICY HAS BEEN ISSUED?Absolutely. If you’re looking to expand your coverage, you will need to be approved again which will require another process of medical underwriting. Once this is completed, your new information will be used to determine your updated premium. If you choose to reduce your benefits, you will not need to undergo medical underwriting again.
HOW ARE PREMIUMS CALCULATED?When calculating a premium many factors are considered. These include your age and health at the time of application, and your benefit choices. Benefit choices include how much your benefit amount is, your benefit period, and your elimination period. Medical underwriting is the process in which your application is examined, then your premium is determined.
DOES LONG TERM CARE INSURANCE HAVE TAX ADVANTAGES?Yes! Any policies that are tax-qualified do have some tax advantages. If you itemize and your total expenses are over 7.5% of your adjusted gross income. In addition, benefit payments are insusceptible to federal taxation and even state taxation in some states. Finally, if your employer provides contributions for LTC premiums they may be 100% tax deductible.
WHAT IF I HAVE PLENTY OF ASSETS TO CARRY ME THROUGH MY RETIREMENTFinancial planning has been crucial for you to achieve this goal. Since Long Term Care can be extremely expensive (between $60,000 and $100,000 every year) using some of the interests acquired from your assets for Long Term Care coverage could be a great way to continue planning for your future! The price of Long Term Care continues to rise but National Educational Services is here to help you find the policy that fits your needs.